1. Global Brands KFC Founded 50 years ago as Kentucky Fried Chicken Today has ~ 5,000 U.S. restaurants; ~ 6,000 abroad 158 franchises in Indonesia, world’s largest Muslim nation KFC in more than 80 countries, including Japan, Australia, Egypt, Mexico, Malaysia, and Swaziland Now 1,100 stores in China

2. Global Brands YUM! Brands (formerly Tricon) committed to international growth Since formation (1997, Pepsi spinoff), has opened 5,100+ restaurants; 3,200 of those have been abroad Plans to open 1,000+ stores/yr overseas for foreseeable future 30,000+ outlets in 100+ countries, most of any restaurant Co in world

3. Global Brands YUM! can’t just open restaurants based on U.S. model and expect success Has to adapt to local tastes, negotiate changing cultural and political climates Japan: KFC sells tempura crispy strips No. England: stresses gravy and potatoes Thailand: offers fresh rice w/soy or sweet chili sauce Holland: potato-and-onion croquette France: pastries in addition to chicken China: chicken gets spicier farther inland; spinach, egg, and tomato soup “If it’s only an American brand without a regional appeal, it’s going to be difficult to market.”

4. Global Brands Key to YUM!’s revival in England was willingness of Co to take more control over franchises Part of trick for any large franchise operator is to allow local flexibility while maintaining quality control and central marketing message YUM! shut down franchises that didn’t meet Co standards, introduced new products, established Co- owned restaurants in France, Holland, Germany to serve as models

5. Global Brands Chinese situation differs, to some extent KFC is most recognized foreign brand in China, ahead of Coke and McDonald’s 540 KFCs (now 1,100), 65 Pizza Huts in 130 cities (even though cost of KFC value meal = 6 hrs average pay) KFC particularly adept at wooing children Kid’s meals, inside playgrounds Marketing: “Chicky” is friendly chicken character created by KFC in Asia; hugely popular  Source: Fortune, 11/26/01; Wall Street Journal, 8/5/04